The Business Confidence Index (BCI) Survey from the Overseas Investors Chamber of Commerce and Industry, business confidence has plummeted in the last six months.
The total Business Confidence Score (BCS) plummeted to 4% in September-October, down 21% from Wave-21 in March-April.
“The decrease in business confidence to -4 percent is unfortunate but not surprising given the tough political and economic climate over the previous six months. In addition, high inflation, higher fuel prices, and currency devaluation all slowed economic activity, said OICCI President Ghias Khan.
“Record August rainfall caused major flooding in Sindh and other parts of the country,” he said.
Sept-Oct score is negative 4%, down 21 points from Mar-Apr.
The services sector saw the biggest loss in confidence (24 percentage points), followed by retail/wholesale and manufacturing (20 percentage points).
The study sample included 42% manufacturing, 33% services, and 25% retail and wholesale.
Despite a 20-point reduction in confidence, the manufacturing sector had a net confidence level of 3 points, while services and retail were 8 and 14 points, respectively.
OICCI conducts this study face-to-face in nine cities covering 80% of GDP, with Karachi, Lahore, Rawalpindi-Islamabad, and Faisalabad giving more weight.
The OICCI survey input includes the regional, national, sectorial, and entity business environment in the previous six months and the next six months.
56% of respondents were “negative” about the business environment in the past six months, compared to 19% in the initial wave. Moreover, compared to the last survey, only 2% of respondents were “positive” for the following six months.
OICCI members’ confidence level was 6 percent, down from 33 percent in the initial wave. In addition, foreign investors have shown more confidence than non-members.
Mr. Khan said foreign investors’ opinions may have been more positive if they weren’t concerned about drug price delays and overseas transfers for products, services, and dividends. Such acts hurt FDI, he said.
Inflation (78%), excessive taxes (71%), and currency devaluation are the top three dangers to corporate growth (70pc).
18% of respondents predict business expansion, compared to 34% in Wave-21. 2% of respondents planned new capital investment, down from 21%. SevenFinally, a percent of respondents predict more hiring, down from 16 percent six months ago.
